DAILY CLOSE: It's beginning to look a lot like Christmas
** The single currency bond market again drew a predictable blank on Friday and that in turn left the weekly euro total at a paltry EUR1.27bn and the lowest since the w/e 16-Aug. That was "spearheaded" by a Monday two-part from IG corporate name ArcelorMittal (EUR1bn 4/7yr), with Land Bremen (EUR250m Nov 2029 LSA tap) and The Platform Group (EUR20m Jul 2028 tap) the only other two making euro plays amid seasonal factors and an ECB meeting – see the IGM WEEKLY VOLUME
** We started the week expecting very little to surface across the board, including in the IG corp space. In recent years issuance has fizzled out by the 10th of the month (11th last year if we include Siemen's 2yr FRN) and so time was not really on the side of a plethora of deals. The market was, therefore, pleasantly surprised to see ArcelorMittal appear opportunistically onto screens with a dual-tranche transaction on Monday (9th of the month) including both 4yr and 7yr legs. The issuer attracted very robust final order books of EUR3.4bn and EUR3.8bn for the two tranches. That level of excess demand (each tranche was finalised at just EUR500m) led to 40bp being chipped off IPTs to land at m/s+120 and +155, or with 5bp NICs respectively. ArcelorMittal’s lifted year-to-date euro corporate (ex-HY) supply to EUR362.75bn to cement 2024 as the third busiest for the asset class on record
** SSA activity, perhaps predictably, was limited to a small volume LSA tap this week. That as Monday saw The Free and Hanseatic City of Bremen increase the size of a 13th November placed EUR500m 5yr deal by a further EUR250m. Offering a 1bp pick-up over the secondary pricing levels (seen on screens the morning of launch) the issuer was able to attract an order book of EUR495m and ultimately priced in line with IPTs
** The covered space has seen EUR157.25bn raised across 208 tranches this year - a figure significantly lower than the EUR170-190bn range initially projected by bankers. This marks the second consecutive year of declining issuance, following the EUR192.81bn in 2023 and record EUR207.28bn in 2022. Euro covered activity in 2024 was characterised by strong issuance in the early part of the year, followed by a slowdown as swap spreads compressed sharply. For a closer look at this year’s covered bond activity and a lookahead to 2025, see IGM’s COVERED VIEWPOINT: Year in Review and Outlook for 2025
** In the non-covered FIG space, the second week of Dec came and went without a deal, leaving the most recent supply having come via a brace of trades on 5th December. The year may not be over yet though given the SCORE SE started calls Friday ahead of a potential EUR500m no grow PNC10 Restricted Tier 1 offering which is expected to emerge in the near future
** Subscriber Notice - upcoming database enhancements: We’re delighted to inform you that IGM is upgrading its industry classifications methodology and will be adding extra values to industry fields, based on the RBICS taxonomy for corporate borrowers. We’re also enhancing our Deal Search output by adding a new field for Country of Risk, and we’ll be displaying the Parent of the borrowing entity and its relevant industry classification too. All this output will be available in Deal Search downloads in Excel. We’ll also be adding these fields as filters to help you select the data and run the reports you’re looking for. We plan to add these new data fields and values during Saturday, 14th December. We hope you find these enhancements useful
IGM Credit Excel spreadsheets and reports
** The IGM European Weekly Credit Overview is your comprehensive round-up of primary European new issue activity including pricing, order book information, new issue concessions and ISINs
** The IGM European Weekly Cheat Sheet provides proprietary intelligence on Euro primary market trends using various key data points in an easily digestible Excel spreadsheet. This includes Euro new issue volumes, average new issue concessions and book cover ratios across asset classes, as well as other key credit proxies
** The IGM Roadshow Calendar is your one stop window on who, when and where. The calendar view provides an instant snapshot of which days are already earmarked for meetings in a convenient PDF format, with clickable links that take you directly to the known schedule
IGM's legal notices
This week's tender announcements include SCOR SE (FR0012199123) and Metinvest B.V. (XS2056722734).
This week's consent announcements include Genertel (XS1733289406) and HMH Holding (NO0013063495).
This week's exchange announcements include Samhallsbyggnadsbolaget i Norden (XS1993969515, XS1997252975, XS2597112155+)
You can find these and more on IGM's Legal Notices story look-up, where clients can access announcements on tenders, consents, exchanges and stabilisation notices.
For IGM's Legal Notices click here.
Friday's broader market developments
** European stocks traded mostly in the red following a negative US/Asia handover and as market participants continued to absorb Thursday’s ECB verdict. Morning focus was on UK data where Oct GDP came in at -0.1% MoM, 20bp lower than consensus and the same as in September, whilst Industrial and Manufacturing Production also missed estimates. Over in Asia, Chinese stocks led a weaker session after the conclusion of economic policy meetings in Beijing following which markets have been amping up rate cut bets while displaying some apparent disappointment to the various pledges made. US stocks bounced at the open after S&P500 (-0.54%) and Nasdaq (-0.66%) both retreated Thursday as jobless claims jumped and PPI came in hotter than expected. French President Macron named centrist leader François Bayrou as France's next PM, in a bid to end months of political turmoil. Swiss trading house Trafigura was in the news after reporting a 62% drop in year-on-year profits amid losses stemming from fraud in its Mongolian oil division
** Stoxx600 fell as much as 0.47%. Real Estate & Health Care stocks the weakest links whilst Financials outperformed
** Govvies: EGB yields nudged higher on the day although moves limited. Comes after yesterday's substantial rise in 10yr yields in Germany (+7.8bps) and France (+9.8bps) but even bigger increases in southern Europe where Italian yields surged by 15.9bps. Latter outperformed slightly on Friday
** Data:
- UK Dec GfK Consumer Confidence higher than exp at -17 (f/c & prev -18)
- UK Oct Industrial/Manufacturing Production both missed at -0.6%/-0.6% MoM (f/c 0.3%/0.2%, prev -0.5%/-1.0%)
- UK Oct Monthly GDP missed at -0.1% MoM (f/c 0.1%, prev -0.1%)
- UK Oct Trade Balance - deficit above f/c at -3718m (f/c -3500m, prev -3462m)
- GE Oct Imports/Exports mixed versus expectations at -0.1%/-2.8% (f/c -1.0%/-2.6%, prev 2.0%/-1.8%)
- FR Nov F CPI confirmed at 1.3% YoY
- SP Nov F CPI confirmed at 2.4% YoY
- EC Oct Industrial Production as exp at 0.0% MoM (prev rev to -1.5%)
- US Nov Import Price Index higher than exp at 0.1% (f/c -0.2%, prev rev to 0.1%)
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What to watch Monday (and for the week)
** Key Data: JN Oct Core Machine Orders (23:50), UK Dec Rightmove House Prices (00:01), CH Nov Industrial Production (02:00), CH Nov Retail Sales (02:00), JN Oct Tertiary Industry Index (04:30), FR Dec P HCOB Composite/Manufacturing/Services PMIs (08:15), GE Dec P HCOB Composite/Manufacturing/Services PMIs (08:30), EC Dec P HCOB Composite/Manufacturing/Services PMIs (09:00), UK Dec P S&P Global Composite/Manufacturing/Services PMIs (09:30), IT Nov F CPI (10:00), US Dec Empire Manufacturing (13:30) and US Dec P S&P Global Composite/Manufacturing/Services PMIs (14:45)
** Key events/speakers: ECB’s Simkus (07:15 & 08:10), Lagarde (07:30 & 08:10), Guindos (08:45), Wunsch (12:00), Escriva (12:30) and Schnabel (16:30) all speak
** Auctions: No major term auctions scheduled for Monday 16th Dec
** Viewpoint - The week ahead:
- FOMC (Tuesday-Wednesday) to deliver 25bp cut. New SEP. Governor Powell presser
- BoJ will probably hold, Riksbank, to cut 25bp. Norges Bank & BoE steady (Thursday)
- US November retail sales (Tuesday), PCE report (Friday)
- Canada November CPI (Tuesday). October retail sales (Friday)
- UK labour market report (Tuesday). November CPI (Wednesday), retail sales/public finances (Friday)
- Japan November trade (Wednesday), CPI (Friday)
** Please note this will be the final DAILY CLOSE of 2024, with the report to resume on Thursday 2nd Jan. Merry Christmas and a Happy New Year from all the IGM Credit team **
All times GMT
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